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My sister has dementia & we need to find out if she qualifies for Medicaid to get help with long term care. Either home health assistance or assisted living facilities.

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Thank you so much for sharing your knowledge it is much appreciated. We live in IL and her 2 adult children and I are trying to help her. She no longer owns a home.
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Medicaid is an “at need” program so she will have to be both medically and financially at need for the type of Medicaid program. And the administration of & type of programs available is dependent on your state as they manage Medicaid although the $ is joint federal & state funding. You need to google your states Medicaid site to see how exacting the “at need” requirements are for the program your thinking about for her.

Most states Medicaid do NOT pay for AL. AL - like IL - is only private pay. 
Unless Sissy can qualify for Section 8 type of IL housing for seniors.
All states Medicaid have to pay for Skilled nursing care- aka a NH - as that is dedicated (required) funding by the feds but the states can determine eligibility within overall federal guidelines. Financially you have to be low or lower income for community based programs (like in home services/IHHS, or community day centers/PACE) or impoverished (under 2k in nonexempt assets for a widow or widower) for in facility LTC care. States can require up to 5 years of financials to determine eligibility. 

Often community based programs require them to be “duals” (on both Medicare and Medicaid) as between the M&Ms all billing is done. 

Finances are what most folks fret about but the medical at need is equally important and can pose more hurdles. Some states allow a wide latitude for being at need medically. Others not so. Based on what others have posted on this site, CA is now only finding medically “at need” to be those hospitalized (Medicare) then discharged to a NH for post hospitalization rehab (a Medicare benefit) and then found  “at need” to stay in the NH to be ok for LTC facility Medicaid (From a policy & planning viewpoint this makes total sense to do imo). If CA does this other states will do it as well. While other states allow for them to move from their home or IL into a NH as Medicaid Pending without being in AL or hospital prior (this is the situation I dealt with for my mom as she did the jump to hyperspace from IL to a NH bypassing the AL phase) if they can document need in their medical chart.

Having some dementia and needing help with ADLs will not be enough in my experience to be eligible for Medicaid in a NH LTC facility. It can be enough for community based type of programs if your state funds those. So....
What does her health chart look like? 
What does her finances look like?
And has she done the legal needed - DPOA, MPOA, HIPPA, signature on her banking - to allow you -her sister- access to her finances and medical? 
Does she have kids & if so where are they in all this and ok on your involvement?
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